July 30, 2009 - FHA announces new Loan Modification Guidelines.

To summarize and make it easier to understand... if you are behind on your payments, less than 12 months in default AND you have an FHA loan AND you want to stay in the house, FHA is willing to look at your scenario and potentially do the following to keep you in your house:

1)  Take the amount that you are past due and bring it current by an interest free loan.

2)  The lender will buy down the loan by up to 30% of the unpaid principal balance and defer reduction amount until home is sold or refinanced.

Therefore, if you have a 100k mortgage and are $8,000 behind on your payments, the new FHA guidelines will potentially bring the loan current and pay down up to $30,000 on your existing mortgage.  You will then have $38,000 as a 2nd interest free lien on your home and a first mortgage of $70,000 thus reducing your mortgage payment significantly so that you can stay in the home.  Keep in mind, you will still need to pay the entire $100,000 +$8,000 = $108,000 when you sell the home or refinance...

Any further questions, feel free to contact us at 317 846-4888.

Derek Gutting, The Gutting Group, Keller Williams Realty, www.GuttingGroup.com